Washington Post interview with Premier Wen Jiabao

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Last updated at: (Beijing Time) Monday, November 24, 2003

Washington Post interview with Premier Wen Jiabao

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Interview with Chinese Premier Wen Jiabao on Nov. 21, 2003 by Executive Editor Leonard Downie Jr., Assistant Managing Editor for Foreign News Philip Bennett, and Washington Post correspondents John Pomfret, Philip P. Pan and Peter S. Goodman.

Premier Wen:

I know this is your first time in China, so let me start by extending my warmest welcome to you and your colleagues. I can quote one fitting ancient Chinese poem to describe our meeting: "Good friends highly value their words. They travel a thousand li to keep their promise for a gathering." In a few days time I will visit your great country. So first of all I wish to convey through The Washington Post my cordial greetings and best wishes to the great American people.

I remember only a couple of days after the September 11 incident I was here receiving participants during an international financial conference in Beijing. And among the delegates to the meeting there was one lady expert from the United States. I noticed that she looked very sad and lonely, so I extended my hand to her and expressed my sympathy, and I also asked her to convey my solicitude to the American people.

China and the United States, two great nations, have had exchanges for over 200 years and across three centuries. And I remember so well so many touching stories about the profound friendship and good cooperation between the two peoples. In the 1860s, Chinese workers, by the tens of thousands, went to the U.S. to build the trans-continental railroad that links the east and west coast. The Chinese workers defied starvation and cold and worked for very meager income. Many other workers could not endure the harsh conditions. Only the Chinese workers stuck it out to the very end. Many, many Chinese workers lost their lives in the process of construction and there were too many to count. It was recorded in history that the last sleeper was laid by four Chinese workers. Hence, in 1991, the state of Illinois sent a delegation to Shanghai solely for the purpose of building a monument with 3,000 railway spikes and they said that the contribution of Chinese workers was essential in linking the east and west coasts and promoting national unity. I also remember very well that from May 1942 to September 1945 a group of young American pilots from the famous Flying Tiger squadron flew the Hump Route to support China during the war against fascism. The Hump Route was famous for its danger and in those years more than 500 planes crashed, claiming the lives of more than 1,500 Chinese and American pilots. That route was also known as the aluminum trail for the wreckage of crashed planes glittering in the sunlight. However, that route is a testimony to the cooperation between the Chinese and the Americans. The reason why I recall these touching stories is because I hope our interview will start in a good atmosphere of mutual respect and friendship. You may ask questions on the list as well as questions not on the list.

Q: One of the current issues for joint Chinese and American action is the current situation in Taiwan. What would you like the President of the United States to do to help China deal with the current situation in Taiwan?

A: The recent remarks and activities by the leaders of the Taiwan authorities, especially their deliberate provocations on the referendum issue and writing a constitution, show clearly not only their obstinate clinging to national splittism but also their stepped up efforts at Taiwan independence.

You put the question of Taiwan to me. Actually, I have also been asking questions: What are the Taiwan authorities driving at with all that they are doing and where are they taking Taiwan? Do they still respect the cherished aspirations of the Taiwan compatriots for peace, stability and development? Do they really want to maintain peace and stability in the Taiwan Straits or are they bent on disrupting peace and stability in the Taiwan Straits? I believe that these questions are of concern to people on China's mainland and of concern to our Taiwan compatriots, and they are also of concern to the United States and the international community at large.

Our policy toward Taiwan is a clear-cut one. It is "peaceful reunification and one country, two systems." We will not give up our efforts for a peaceful settlement of the question of Taiwan because a peaceful settlement is in the fundamental interests of all Chinese people, our Taiwan compatriots included. But we will not sit by and do nothing faced with provocative activities aimed at splitting the motherland.

China's sovereignty and territorial integrity brook no division and the position of the Chinese government on upholding the one-China principle is rock firm and defies all challenges. I hope the U.S. government will recognize the gravity and danger of the provocative remarks and actions taken by the leader of the Taiwan authorities that would undermine the prospects for peaceful reunification and that the U.S. side would not send any wrong signals to the Taiwan authorities. And we hope that the U.S. side would take practical measures that are conducive to the maintenance of peace and stability in the Taiwan Straits.

Q: Are there specific measures that you would like the United States to take? Do you have specific measures in mind?

The Taiwan question is the most important and sensitive issue in the China-U.S. relationship. So on the question of Taiwan, the U.S. side must be very straightforward in adhering to the principles of the three Sino-U.S. joint communiques and in opposing Taiwan independence. The U.S. side must be crystal clear in opposing the use of a referendum or writing a constitution or all other tactics used by the leader of Taiwan authorities to pursue his separatist agenda. And the U.S. side must adhere to the principle of the Aug. 17 communique and stop arms sales to Taiwan. This will fundamentally help maintain peace and stability in the Taiwan Straits. It will also be conducive to the advancement of the process of the peaceful reunification of China. It will also be fundamentally helpful to the maintenance of world peace and stability.

Q: If the leadership of Taiwan continues to proceed along the road it is on, despite what you say and despite what the Americans might say, what measures is China prepared to take?

A: That is the most crucial question. Taiwan is China's sacred territory and is an inalienable part of Chinese territory. No Chinese government will abandon the position of peaceful reunification on this question. We completely understand the desire of the Taiwan compatriots for democracy, and we also understand their hopes for a peaceful environment. However, when the leadership of the Taiwan authorities wants to separate Taiwan from Chinese territory, no Chinese will agree. The Chinese people will pay any price to safeguard the unity of the motherland. I assume that you are familiar with the words of President Lincoln, who once said, "a house divided against itself will not stand." He also said that "the Union (composed of States) is perpetual." It is our hope that the situation would not lead to that point. Therefore, we will not give up our efforts for peace.

Q: China is a very large trading partner of the United States. Recently, the Bush administration announced its intention to restrict some exports of Chinese textiles. Do you believe it will be necessary for China to take retaliatory action?

A: Problems that crop up in our bilateral trade and economic cooperation must be handled properly because the expansion of trade and the development of economic cooperation between us serve the fundamental interests of the Chinese and American peoples. In 1972 when the door was open to our relationship 30 years ago, our trade was practically nil. At the time Dr. [Henry] Kissinger visited China, each visiting American to China was only allowed to carry $100 to spend in the Chinese market. We only started to have statistics about our trade in 1979, and in that year the trade volume was less than $2.5 billion. Now, after 25 years our joint cooperation and trade has developed significantly and trade volume has already reached $100 billion ? that's a 40-fold increase. So you can see the development of such a trade relationship has served the interests of both peoples.

I am aware of the U.S. concern over the huge trade imbalance. I would like to give you a few explanations. First, such a trade imbalance is to a great extent structural and a result of shifting commercial relations. I will give you one example. While the trade imbalance that exists between China and the U.S. is going up, China's trade deficit in our trade with Asian countries is also going up at the same time. In the first 10 months of this year, China's exports grew by 32 percent, however our imports grew by 40 percent.

Second, if you look at our export, actually Sino-foreign joint ventures or wholly foreign-owned enterprises contribute to 65 percent of our total exports and more than half of our exports involve the processing of imported material or parts, and the majority of profits actually go to the foreign investors. These enterprises include the U.S.-invested enterprises in China, such as Motorola and Wal-Mart.

Third, what we sell to the U.S. market are the products that U.S. consumers need, and Chinese products are affordable but of very good quality. So our exports actually help stabilize the price in the U.S. markets and also satisfy the needs of U.S. consumers.

Fourth, it is not China's aim to seek long-term and excessive trade surpluses. Our aim in trade policy is to have a basic balance between imports and exports. We are willing to open up our markets to buy more from the United States and other countries, especially to purchase high-tech products.

Not so long ago, we sent a few purchasing missions to the United States and they signed contracts worth billions of U.S. dollars. That demonstrates our sincerity. At the same time, we hope that the United States would grant market economy status to China and lift restrictions on China and open up its market.

I can give you an example. A few years ago, China placed an order for a Loral satellite and we paid a deposit of more than $130 million. However, the relevant US departments do not agree. So the contract has not been implemented and the $130 million deposit has not been refunded.

In reality, these restrictions can in no way hinder China's development. In the past few years, China has continuously sent satellites successfully into orbit and we also have our space program. For instance, some digital machine tools, some computers -- with respect to these projects, China already has very strong R&D capabilities and in certain areas are actually at the forefront. Nevertheless, the United States still places these products on the list of restricted items.

Q: Given everything you've told me so far, were you surprised then by the action on textiles and is there anything China needs to do in response?

A: I'm not just surprised, I'm shocked and the Chinese people have been surprised and shocked. This unilateral restrictive action, involving textile products only worth $400-500 million and without any prior discussion with the Chinese government, seriously wounded the feelings of the Chinese people. I wonder if you have taken note of the response by the international community and the reaction of experts in the field. Such a decision has hurt the US market. I want to invoke another Chinese saying: We should not be afraid of the dark clouds blocking our view because we are already at a high elevation. With respect to our joint cooperation in trade and in cooperation in other areas, it is important to adopt a strategic perspective like the view you would have when you are already on top of Mount Tai. Then all other mountains would be dwarfed.

We hope between China and the U.S. we can establish a mechanism for regular coordination and cooperation to tackle the problems that might come up. This will be one of the proposals I will bring to the United States because I think such a mechanism would play a positive role in solving problems. The establishment of such a mechanism will provide guarantees for equal consultations as a way to handle our disputes. Arbitrarily imposing sanctions or restrictions will not help solve the problem. On the contrary, it will hurt the interests of both sides. I hope the textile issue can be properly tackled through consultation between the two sides.

Q: What is your thinking about the suggestion that changing the way in which the Chinese currency is valued would make a contribution to the trade relations between the two countries?

A: We first began reforming our exchange rate regime in 1994. It was decided at that time that we would adopt a market-based, single, managed floating exchange rate regime. Some people claim the value of the RMB is fixed and has not changed. This does not square with the facts. I think it would be more accurate to say that the band of fluctuation of the RMB is quite narrow. Since 1994, the RMB has appreciated in real terms by 18.5 percent against the U.S. dollar and by 39.4 percent against the Euro. In 1997, during the Asian financial crisis, we withstood pressure for RMB devaluation and since then, the band of fluctuation of the value of the RMB has been quite narrow.

The exchange rate of a country's currency should be set in accordance with its national conditions and the state of its economic and financial sector. There is no denying we still face very daunting tasks in financial and banking reform. We already allowed our currency to be freely convertible under the current account in 1996, and it will take a very long period of time and arduous efforts before we can achieve the objective of a freely convertible currency under the capital account. We are definitely going to accelerate reform of the financial and banking sector and while we do so we'll explore how to form a rational mechanism in which the value of the RMB will fluctuate on the basis of market conditions.

I don't think the exchange rate of the RMB is an important contributor to the trade imbalance between China and the U.S. The increase of China's export is mainly attributed to the abundant supply of competitive labor in China.

Q: China and the United States are working closely together to try to assure that the Korean peninsula remains free of nuclear weapons. Do you believe that North Korea currently possesses nuclear weapons?

A: I am unable to give you an answer to that question because I truly don't know. But I can clearly tell you our attitude. We hope the Korean peninsula will be free of nuclear weapons, and we hope that peace and stability will be maintained on the Korean peninsula.

Q: President Bush has assured the North Koreans that the United States does not intend to attack. Are there other specific steps that you believe the United States should be taking to try to bring a resolution, to create an agreement with North Korea?

A: You must have also noticed that there has been some progress in the process of dialogue on the nuclear issue. The DPRK has stated that it does not seek to possess nuclear weapons and that denuclearization is its ultimate goal. And recently, it has also said that under the prerequisite that its security concerns are met and the United States abandons its hostile policy toward the DPRK, the DPRK is prepared to give up its nuclear program. The Bush administration has repeatedly said that the United States has no intention to invade or change the regime of the DPRK, and that it wants to resolve the nuclear issue through peaceful negotiations. So in my view, the positions of two sides are now closer than before.

I think the best way is to continue with the Beijing six-party talks so that all parties concerned can sit together to have discussions on the basis of mutual respect, equality and mutual trust, and through such consultations they can, in the end, work out a solution that is acceptable to all parties concerned and that is helpful for the peaceful resolution of the nuclear issue.

Q: The Dalai Lama has declared that he is not seeking independence for Tibet. Do you foresee face-to-face meetings with the Dalai Lama and representatives of China?

A: Regrettably, the Dalai Lama has not genuinely given up his position of Tibet independence and has not given up the separatist activities aimed at splitting the motherland. He also has not recognized that Taiwan is an inalienable part of Chinese territory.

We have taken note of the recent remarks by the Dalai Lama but we still need to watch very carefully what he really does. So long as he genuinely abandons his position on seeking Tibetan independence and publicly recognizes Tibet and Taiwan as inalienable parts of Chinese territory, then contacts and discussions between him and the central government can resume. The door to communication between the central government and the Dalai Lama is wide open.

Q: China's economic performance has been very rapid in recent years, creating a very strong Chinese economy, and great economic growth in a short period of time. Do you also believe political reform should be accelerated to keep pace with economic reform?

A: China embarked on the road to reform and opening up in 1978. Our reform is a comprehensive one which includes both economic and political restructuring. Precisely as Mr. Deng Xiaoping pointed out, without the guarantee of political reform, economic reform will not be successful. In essence political restructuring in China aims at integrating the leadership of the Chinese Communist Party, rule of law in the conduct of public affairs and the people's role as masters of their own affairs.

At present, it is particularly important to do a good job on the following. First of all, we should develop democracy to safeguard people's democratic rights and to respect and protect their human rights. Secondly, we should improve on the legal system through better legislation, better administration according to law, and greater judicial reform. Thirdly, we should run the country according to law, making our socialist democracy more institutionalized, standardized and proceduralized, and in this way we can make sure that it will not change because of changes in the leadership and changes in the views and focus of attention of leaders. Fourth, we must strengthen supervision, and we should make sure that the government is placed under the supervision of the people. We have to develop democracy and strengthen supervision. Only in this way can we make sure the government will not relent in its efforts, and the situation whereby the policy fails when the leadership changes will not occur.

China is a big country with 1.3 billion people. So to press ahead with political reform, it has to be done in an orderly and well-organized fashion. Now there exist many misunderstandings. For instance, with regard to freedom of religious belief, freedom of religious belief is actually written into China's constitution. China currently has over 100 million religious followers. China has over 100,000 religious sites. Since the beginning of reform and opening up, one religious site has been either newly built or restored every three days. You may just take a walk around the Zhongnanhai compound, and you can see many religious sites. For instance, the Wangfujing Catholic church to the east, the Niujie mosque of Islam to the south, the Yonghe Buddhist monastery to the north and the Baiyun Taoist temple to the west. Nearest to Zhongnanhai is the Xishiku church with a long history. You may visit these religious sites. You will see many people practicing their religious faith there.

Over the past 5,000 years of Chinese history, China has been very tolerant toward the development of religion. Among the five major religions in China, only Taoism is an indigenous religious belief. The other four actually came from overseas. For instance, Buddhism came to China from India, Catholicism and Protestantism from the West, and Islam from the Middle East and West Asia.

Q: What steps do you anticipate will be taken next in political reforms? For example, might direct elections of local governments be extended upward to the township level?

A: You must know quite a lot about Chinese elections. At the moment, we have introduced the practice of self-administration and direct elections in 680,000 villages. This is a great innovation, and it is also very good practice for Chinese farmers. We have also introduced suffrage for the election of people's deputies at the level of townships, counties and urban cities without districts. Indirect elections are held for the leadership of the provinces, autonomous regions, municipalities with districts, as well as the central authorities. Why? This is because China is such a huge country. It has a big population. It is underdeveloped, and economic development is uneven between regions. So conditions are not ripe for direct elections at the higher levels. The first hindrance in my view is the inadequate education level of the population.

Q: Premier Wen, you mentioned uneven development during this period of great economic growth. Are you concerned about a gap growing in economic conditions between the more well off parts of China and the poorer parts of China, such as in the west?

A: I do have such concerns. Not too long ago, the Commerce Secretary, Mr. Evans, visited China, and he started his visit going to China's northwest. He came to see me with two photographs that were taken when he visited the countryside in China's northwest. From his visit, he learned that the countryside in China is still very backward. So I told him with this knowledge, all the problems that he was about to discuss with me could be well solved.

I've personally been to over 1,800 counties throughout the country. So I'm in a position to say I've seen the worst poverty in China. So I know very well how uneven our development has been. Yes, it is true that in the coastal areas in the East, skyscrapers overwhelm you. However, in large areas of the countryside, people are still living in shabby houses with thatch roofs and still use oxen to till the land. Thirty million people are still below the poverty line.

So one important inspirational lesson we have learned from the struggle against the SARS epidemic is that we have to emphasize coordinated development. And this is what the new Chinese leadership has learned from the struggle against SARS.

Uneven development between the urban and rural areas, and imbalance between economic development and social progress -- this situation can be described with an analogy. It's like a human being who has one long leg and one short leg. If one leg is longer than the other, this person is bound to stumble and fall. And a country with one leg longer than the other will also stumble and fall.

But the problem can only be resolved through continued development. The eastern part of the country will be encouraged to continue with the big momentum of their development. And where conditions permit, they should take the lead in achieving basic modernization. This is because through their development, a lot of financial resources will be made available to support the development of China's center and west. At the same time, we're also implementing a strategy to develop China's western region. And very recently, we decided to implement a strategy to revitalize the old industrial bases in China's northeast. So with good interaction between the east and west, we hope to bring along development in the central region of the country. With all these efforts, we hope we can gradually bring about more coordinated development between different regions. But I want to remind you that this could be a very time-consuming process.

Q: Is this also the reason why you are changing the constitution to protect private property rights and giving farmers the right to buy and sell land use rights?

A: We have decided on an important policy and that is public ownership will be the mainstay and multiple forms of ownership will develop side by side. To sum up, we can use two "unswervingly" to describe this. We will unswervingly uphold the public ownership system and develop the public sector, and we will unswervingly encourage, support and guide the development of the non-public sector, the private-sector included.

This basic economic system has been written into our constitution, and in the recently held third plenary session of the 16th Central Committee of the Chinese Communist Party, the concept of property rights was introduced. It was made very clear at the session that we would formulate legislation protecting private property. Such a move was entirely based on China's actual conditions in the spirit of seeking truth from facts, because this will help accelerate China's economic development. It will also help ease the pressure from employment. It will also give greater scope to the creativity and enterprising spirit of the Chinese population and will in the end help us achieve the goal of common prosperity. At the moment, privately run enterprises employ a total of 80 million workers and they contribute to 23 percent of our GDP. In the countryside, we have the household contract system. It has long since been stipulated that land operated by farmers can be transferred in a lawful and compensatory manner.

Q: Earlier you mentioned the financial sector. Do important changes need to be made there to provide more financing for the private sector and business? And does the government need to take steps to deal with the loan problem at some of the big banks?

A: Financial reform is the most crucial part of our overall economic reforms. As is known to all, the financial sector in China has been plagued by many problems. The biggest problem is the fairly high proportion of nonperforming loans from banks. There exists significant risk. The problem is caused by defects in the system. So we have to accelerate the reform of the banking system. Our aim is to put in place a modern banking system whereby the commercial banks will be commercial banks in the true sense of the word. That means they will be responsible for their own operation decisions and they will be held responsible for their profits and losses. On our part, we will help create conditions to introduce corporate governance to the banks through the share-holding system. Those that meet the conditions can go public or be listed.

You also touched upon an important point, that is to ensure there will be more financing in support of small and medium-sized enterprises and also the privately run enterprises. I have to admit that not enough has been done in this field, even though the small and medium-sized enterprises play a very important role in creating job opportunities and in providing employment. So while we step up regulation and improve our capability to avoid financial risks, we should make sure that the banks would provide more financing and support of these small and medium-sized enterprises.

Q: If I may ask one question about the events of 1989 in Tiananmen. You went to visit the students there during that time. Have you concluded were they counterrevolutionaries or were they patriots?

A: In the last century, at the turn of the 1980s and 1990s, drastic changes took place in the Soviet Union and countries of Eastern Europe. In China, a political disturbance occurred. At that time, the party and government of China adopted resolute measures in a timely fashion to safeguard social stability and became more determined to press ahead with China's reform and opening up. Our development over the past years has proven that stability is of vital importance for China. As Premier of this country, I think the most important issue for me is to ensure stability and development. This is because China has 1.3 billion people.

Q: You've talked about stability being an important concern of yours here. President Bush has in two recent major speeches talked about the importance of freedom as a core American value. Do you see the core values of America and China being different or similar, and how does that affect the future development of Chinese-American relations?

A: Let me ask you a question. In the past 25 years of reform and opening up, enormous changes have taken place in China's economic landscape. Have people from the outside ever seen the changes taking place in China's democracy and freedom? At the moment, people can choose what kind of jobs they want to have, they can choose what kind of information they seek, they can choose where to visit. Twenty-five years ago, for a Chinese person to visit a foreign country or even to visit Hong Kong, part of our own country, it was very difficult or almost impossible. At the moment, every year, tens of millions of Chinese travelers visit places across the world. And in addition, as I said earlier, we now have freedom of religious belief.

Let me share with you how I feel about my duties. As Premier of China, my responsibility is heavy, the job is demanding, and there is endless work to do. 1.3 billion is a very big number. So if we use multiplication, any small problem multiplied by 1.3 billion will end up being a very big problem. For a very big aggregate divided by 1.3 billion, it will come to a very tiny figure. This is something that is quite difficult for foreign visitors to understand and appreciate.

I remember that in the Declaration of Independence, Jefferson wrote that all men are created equal, that they are endowed by their creator with certain inalienable rights, that among these are life, liberty and the pursuit of happiness. He put life before anything else. So when we say that for the Chinese people's human rights, the right to life and development is most important, sometimes our friends in the Western countries find this difficult to understand. I think they only need to refer to the Declaration of Independence written by Thomas Jefferson. In 1776, in that Declaration of Independence, he already put the right to life before every other right. The U.S. has also witnessed the process of development of democracy if you look at the history, from the Declaration of Independence in the 18th century, the Civil War in 19th century, and to the Martin Luther King incident in the 20th century.

If I can speak very honestly and in a straightforward manner, I would say the understanding of China by some Americans is not as good as the Chinese people's understanding of the United States.

Q: Speaking of that, you seem to have a very good understanding of the United States. Have you visited the United States before?

A: I have not made an official visit to the United States, but I've been to the United States during a stopover on my way to South American countries. I spent a few days in New York and in Los Angeles.

Q: So you know a lot from what you've been reading I imagine about the United States. Is there anything that's made a particular impression on you in your reading about the United States?

A: My biggest hobby actually is reading. I don't know how to live without books. They're my best companion. Let me share with you a story. Once I had a meeting with the President of the Republic of Korea, Mr. Roh Moo-hyun, and he told me that in his inauguration speech, he quoted President Abraham Lincoln from one of his speeches in 1861. So after the meeting, I went back home and looked for the book about Abraham Lincoln on my bookshelf, and I found that paragraph. In the very same paragraph, I had already used red pencil to underline these lines.

He wrote, "The mystic cords of memory, stretching from every battlefield and patriot grave, to every living heart and hearthstone, all over this broad land, will yet swell the chorus of the Union, when touched again, as surely they will be, by the better angels of our nature."

So my understanding is that Lincoln's approach to the Civil War had an impact, an influence on President Roh Moo-hyun on how he's going to address the problems between the North and the South. President Roh wants to see reconciliation between the two.

I want to make one last remark. Last year, President Jiang Zemin visited the U.S. and this year, President Hu Jintao has met President Bush twice. The Chinese side has explicitly stated its desire to further improve and develop its relations with the U.S. The United States is the most developed country in the world. China is the most populous developing country in the world. To develop friendship and cooperation between these two countries will not only bring benefits to our two peoples but also be conducive to peace and stability in Asia and the world at large. In 1972, farsighted leaders on the two sides opened the door for exchanges between us, and put an end to 23 years of estrangement and no contact. That started the peaceful coexistence between us. Despite the many ups and downs we have experienced, our relationship has moved forward. So what have we learned from the past years of the history of our relationship? I think at least we can draw three conclusions. First, cooperation will bring benefits to both nations, whereas confrontation will hurt both sides. Second, there exists a good basis of cooperation and common interests between China and the United States. Third, friendship and cooperation between China and the U.S. is not only conducive to peace and stability in the Asia-Pacific region, it is also conducive to peace and stability throughout the world.

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